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European stocks dropped, snapping two days of gains, as China cut its forecast for economic growth this year and data showed manufacturing and services in the euro area shrank more than estimated.
China reduced its growth target to 7.5 percent this year, the lowest goal since 2004, according to a transcript of Premier Wen Jiabao’s address to the National People’s Congress. The government will also aim for inflation of about 4 percent this year, unchanged from its goal in 2011.
Stocks extended declines after euro-area services and manufacturing output shrank in February more than economists had estimated as the region’s economy struggled to rebound from a contraction in the fourth quarter of last year.
A euro-area composite index based on a survey of purchasing managers in both industries dropped to 49.3 from 50.4 in January, London-based Markit Economics said today. That was below an initial figure of 49.7 published on Feb. 22. A reading of less than 50 means the measure contracted.
National benchmark indexes declined in every western- European (SXXP) market except Switzerland and Iceland today. France’s CAC 40 Index (CAC) slipped 0.4 percent, while the U.K.’s FTSE 100 Index fell 0.6 percent. Germany’s DAX Index (DAX) lost 0.8 percent.
Rio Tinto dropped 3.9 percent to 3,422 pence, BHP Billiton Ltd. fell 2.9 percent to 1,971 pence and Vedanta Resources Plc slid 3.7 percent to 1,400 pence. Copper declined for a second day in London after China cut its target for economic growth.
Salzgitter sank 5.4 percent to 42.88 euros after the German steelmaker said it was “impossible” to provide an earnings forecast because the euro area’s sovereign-debt crisis remains a major risk.
Kloeckner & Co, Europe’s largest independent steel trader, dropped 3.3 percent to 11.23 euros.
Weir Group Plc retreated 4.7 percent to 1,939 pence as Citigroup Inc. downgraded the world’s biggest maker of pumps for the mining industry to “sell” from “neutral.”
BP climbed 1.6 percent to 504.6 pence, limiting the Stoxx 600’s slide, after Europe’s second-largest oil producer reached a deal with private plaintiffs -- the businesses and individuals harmed by the 2010 oil spill.
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